Legal Matters Scotland
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29th March 2024

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THE LAW
First Minister accused of ignoring warnings over new hate crime law
Scotland's first minister has been accused of "ignoring" warnings over the impact of a new hate crime law. The Hate Crime and Public Order (Scotland) Act will come into force on April 1, consolidating existing legislation and creating an offence of stirring up hatred against protected groups. The legislation has faced criticism for potentially chilling free speech and being open to vexatious complaints. The Association of Scottish Police Superintendents (ASPS) warned that the law could be "weaponised" by an "activist fringe". Scottish Conservative leader Douglas Ross raised concerns about the law, stating that people will not be protected if the police cannot do their job. The first minister, however, expressed confidence in Police Scotland's ability to handle vexatious complaints. The controversy surrounding the hate crime law has sparked a debate on free speech and the effectiveness of the legislation.
Ministers plan to crack down on misuse of NDAs
The Government has announced plans to crack down on the misuse of non-disclosure agreements (NDAs) to ensure they are not used to silence victims of crimes. The law is set to be changed to make sure NDAs cannot be legally enforced if they prevent victims from reporting a crime. The change will mean information related to criminal conduct can be discussed with law enforcement agencies and lawyers while elements of confidentiality agreements relating to commercially sensitive information or financial agreements will retain their legal effects. Justice Secretary Alex Chalk said: “We are bringing an end to the murky world of non-disclosure agreements, which are too often used to sweep criminality under the carpet and prevent victims from accessing the advice and support they need.” He added that the changes will ensue that gagging orders cannot be legally enforced against victims “to prevent justice from being delivered and their voices being heard.”


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PROPERTY
Charities forced to cut housing help service in Edinburgh
Charities providing housing help in Edinburgh have been forced to wind down their services due to uncertainty over funding. Two local charities, Community Help and Advice Initiative (CHAI) and Granton Information Centre, have been providing housing advice and support to renters, including those with private landlords. However, they have been unable to secure funding, administered through SLAB (Scottish Legal Aid Board), beyond the end of March and have been forced to cut the service. This has raised concerns that renters, including families with children, will be left without specialist support as other services are already at capacity. The charities are now directing people to housing and homelessness charity Shelter, although their legal team is not currently taking on new appointments due to extreme demand.
Amended legislation sees home swaps exempt from short-term letting rules
Scottish ministers have revised short-term letting rules to exempt home swaps after facing criticism. The rules, which require a licence for short-term rentals, caused confusion over whether they applied to home exchanges where no money is exchanged. Following discussions with the sector, the Scottish Government clarified that no licence is needed for free home swaps not conducted as part of a business. However, arrangements involving services, goods, donations or business activities still require licensing.



 
CASES
Post Office knew its court defence was false
The Post Office spent over £90m fighting sub-postmasters in the High Court despite knowing that its defence was untrue, according to a draft report uncovered by the BBC. The documents show that losses in Post Office branches could be inserted remotely without postmasters' knowledge. The assertion that remote access to sub-postmasters' computers was impossible was central to the Post Office's position that there had been no miscarriages of justice. The draft report, named Operation Bramble, was commissioned by the Post Office in March 2016 and carried out by Deloitte. It stated that staff at Fujitsu, the firm responsible for the Horizon software system, were able to edit or delete transactions recorded by branches. Throughout the draft report, Deloitte refers to having already discussed its findings with "Post Office management". While Fujitsu whistleblower Richard Roll had said the company could remotely alter sub-postmaster's cash accounts, the report is the first documentary evidence that the Post Office knew Fujitsu staff did this without a sub-postmaster's knowledge.
HEALTH
Application made for Aberdeen drug testing centre
An application has been made by support service Alcohol and Drugs Action (ADA) to the UK Government for the opening of a drug testing site in Aberdeen. The facility is part of a Scottish drug-checking project pilot scheme, aimed at reducing harm and overdoses. If approved, the service will be available for individuals over 18 who are dependent on or experience significant harm from drugs. Support workers will use testing machines to examine the content of illegal drugs, with samples sent to a national testing laboratory for further analysis. The testing centre will operate alongside ADA's Enhanced Injecting Equipment Provision programme. Aberdeen City Council co-leader Christian Allard welcomed the progress with the pilot scheme. He said: “Greater knowledge about the composition of street drugs will help people using the service better understand the risks, and in the longer term improve policies for managing drug-related issues.”
TAX
Oil and gas industry disappointed over windfall tax
While extending the Energy Profits Levy (EPL) to March 2029 is expected to raise an extra £1.5bn for the Treasury, critics argue that the extension raises concerns about the UK's attractiveness for investment. The EPL has already impacted the profits of energy producers, leading to a decline in drilling in the North Sea and experts have warned that the windfall tax could hinder oil and gas companies from playing a crucial role in developing green energy sources. They argue that the UK's transition to net zero will require significant investment, and tax incentives are crucial to ensure this happens. However, Harry Wise in the Mail warns that mid-sized oil and gas businesses with high exposure to the North Sea are unlikely to contribute to the funding needed for achieving net zero while the EPL is in place. Meanwhile, North Sea oil company EnQuest is demanding an overhaul of the windfall tax, claiming it has been hit by an effective rate equal to 113% of profits. The company suffered a £25m loss last year after paying taxes of £63m. It was also hit by other corporation taxes, landing it with a total bill of £207m.
INTERNATIONAL
FTX founder jailed over fraud
Entrepreneur Sam Bankman-Fried has been sentenced to 25 years in prison for the billion-dollar fraud that resulted in the collapse of FTX, the cryptocurrency exchange he founded. Mr Bankman-Fried was convicted of fraud and conspiracy and prosecutors say he had cost customers, investors and lenders over $10bn by misappropriating funds. Judge Lewis Kaplan said investors in FTX had lost $1.7bn, lenders had lost $1bn and customers saw losses of $8bn. Mr Bankman-Fried has been ordered to forfeit $11bn that can be used to compensate victims. Some of Mr Bankman-Fried’s inner circle – including Caroline Ellison, the former chief executive of FTX’s trading arm Alameda Research - have pleaded guilty and testified against their former boss. Ms Ellison, who had been in a relationship with Mr Bankman-Fried, told the court that the entrepreneur directed her to commit fraud and use FTX customer funds without their knowledge.
ECONOMY
UK the second most targeted country for M&A
Data from the London Stock Exchange Group shows that the UK is now the second most targeted nation for mergers and acquisitions, behind only the US. Deals in the UK have hit $76.1bn so far in 2024, marking an 88% increase on the same period in 2023. While the value of M&A deals has surged, the number of deals has fallen by 25%. So far this year, the UK has been the target of 7% of global mergers and acquisitions. This time last year it was the fifth most targeted nation and accounted for 4% of M&A. The value of domestic M&A is up 167% on last year, while foreign companies targeting UK companies has increased by 118%. The report also shows that 45% of mergers and acquisitions targeting UK companies have been carried out by an overseas acquirer. The value of UK outbound M&A has fallen 14%, slipping to a five-year low of $14.3bn.
 


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